Though cryptocurrency has become much more famous these days, people still don’t know much about it. Ask about cryptocurrency and all they will know is that Bitcoin is one of them. Forget about the method to store the same. When it comes to cryptocurrency trading people know that it is a good option to make money. Many traders start investing in Bitcoin without knowing how to keep it safe and avoid hacking the same. So when you know what cryptocurrency is and you are interested in trading the same, you should know how to store it properly.
In this article, we will see which Cryptocurrency one should use to store it in the best possible manner. But before we jump on which wallet you should use to store cryptocurrency, let’s know what cryptocurrency wallets are?
Cryptocurrency Wallets:
Which cryptocurrency wallet you should use:
So to store cryptocurrency you require a cryptocurrency wallet. It is a kind of program which helps you store your digital money. These wallets also provide you with public and private keys and hence supports Transparency. The basic purpose of these keys is to provide your cryptocurrency with security. The private key acts as a gateway to your wallet. Keep your currency private you have to lock your wallet and to open the wallet you need the private key. As well as you need this while performing the transaction.
The next one is the public key, as the name suggests this type of key is visible to all. This is specifically generated by your bonnet to increase the privacy of your trades. As we all know cryptocurrency is decentralized money where it is not controlled by any central authority. Like the deals you attain in your bank account where it sends your account number and name, similarly, the wallet only sends your public key to your agreement partner, keeping your name and other identities private. This is one of the most important features of a cryptocurrency wallet. This makes your commerce and your identity secure from hackers. However, while accomplishing the transaction you have to make sure that the public ID of the one you are sending money to is correct.
No sooner than you get your money exchanged into cryptocurrency, the exchange will directly transfer the money to your wallet. Hence you must get all your wallet related activities done before purchasing the currency. You do not want to be stuck in a situation where you purchase the currency from the exchange but the exchange finds it unable to transfer it to your wallet because of compatibility issues. That is why while selecting the wallet and also exchange make sure both are compatible.
There are several types of wallets available to store and execute trades on cryptocurrency. You just have to go through the different categories of wallets along with their features and this will help you choose the best one for you.
Wallets are basically divided into two major types. One is a hot wallet and the other one is called a cold wallet. A hot wallet works on internet connectivity. On the other hand, cold Wallets don’t require any internet connection to perform the pacts. These two wallets are further divided into three sub-categories: software wallets, hardware wallets and paper wallets.
- Software Wallets:
With the name, it is quite clear that software wallets are the ones available in the form of software. These are the ones that you can download from the websites of different wallets. You can easily get mobile and desktop versions of these wallets. Most of the websites also provide Android and IOS specified. Most of the software wallets require internet connectivity to store Bitcoins and conduct the transaction. There is not much difference between mobile wallets and desktop wallets except for the fact that mobiles are more portable than desktops and this eventually makes mobile wallets portable than desktop ones. Both wallets generate public and private keys to support transparency features.
Pros Of Software Wallets:
This type of wallet has easy accessibility and great performance. If you are a trader who is into quick and consistent investments, then these types of wallets can be a good option.
Cons Of Software Wallets:
As you have to connect the wallet with the internet to complete the commerce it becomes easier for hackers to hack the Bitcoin. Hence in terms of safety features, these wallets are not up to the mark.
- Hardware Wallets:
These are the devices on which you can store your cryptocurrency. All you have to do is purchase this device and let the exchange store your currency in it. However, to execute the trade you will have to connect the wallet with the internet. You can also use this type of wallets for trading purposes. Go to Bitcoin Loophole and download one of the best trading applications.
Pros of Hardware Wallets:
The major advantage of using this type of wallet is you only need an internet connection while attaining the deals. This feature makes the wallet more secure than the software wallets.
Cons of Hardware Wallets:
As hardware wallets are in the form of a small device you always have to carry them with you wherever you go. There is also a chance of losing this small device. This makes it a lot more portable and easy to access Wallets.
- Paper Wallets:
This category of wallets is in paper format. Here when you go to the exchange they store your cryptocurrency in this paper, by making an entry in your document. The paper wallet doesn’t require an internet connection to perform any transaction. Also, paper wallets are a better option for those who are into a long time and big investments.
Pros of Paper Wallets:
You did not require an internet connection, which means the hackers can’t hack these types of wallets. Hence paper wallets eventually become one of the safest ways to store cryptocurrency.
Cons of Paper Wallets:
As this type of wallets are in the documented format whenever you want to enact the transaction you have to carry these wallets with you. Also being a small piece of paper the chances of losing the wallet also increases.
Looking at the pros and cons of all the different kinds of wallets it will become easier for you to judge which one would work for you. If you want quick and easy access you can go with software wallets. If you know that you can handle the device well and are not willing to put your trust in software wallets you can go with the hardware one. Those who think that security comes first and handling a small piece of paper could be an easier game can choose a paper wallet.
Risk Warning:
Investing is not suitable for everyone; please ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Please conduct your own due diligence.
